Sunday 24 September 2017

Europe starts to grow at long last but Trump could still spoil party

The eurozone appears finally to be coming to life even as political uncertainty rises by the day, writes Dan O'Brien

Polish Prime Minister Beata Szydlo greets Taoiseach Enda Kenny during his trip to Warsaw last Thursday. The visit comes at time when the previously plodding eurozone economy looks like it might finally be on the up again Picture: Artur Widak
Polish Prime Minister Beata Szydlo greets Taoiseach Enda Kenny during his trip to Warsaw last Thursday. The visit comes at time when the previously plodding eurozone economy looks like it might finally be on the up again Picture: Artur Widak
Dan O'Brien

Dan O'Brien

Something is stirring in Europe. Almost 10 years on from the beginnings of the worst slump since the Great Depression, the continental economy appears to be picking up its plodding pace of growth. Last year, the eurozone economy outpaced that of the US for the first time in almost a decade. This year is shaping up in much the same way. Economic forecasts for the eurozone - for what they are worth - are being revised up almost by the week.

All this is happening against the backdrop of extraordinary political instability. The European integration project is going into reverse with the departure of Britain from the EU, and uncertainty abounds regarding future EU-UK relations - economic and otherwise.

In the nearer term, the impact of the rise of non-mainstream politics is causing growing economic uncertainty. Most immediately and most seriously, the (still slim) chance of the reactionary Marine Le Pen becoming president of France in May is causing, among other things, French government bond yields to rise markedly.

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